A taxing situation hits Ontario wine sales (Image: Derek Purdy)
In its far-reaching attempts to promote fully local Ontario wine, as opposed to partially local blended plonk, the provincial government has left no stone unturned: an aggressive pro-VQA marketing campaign to clear up the confusing “Cellared in Canada” labels, and now, contradictory logic. A new tax on blended wine that will go into effect on July 1, equating roughly 62 cents on an $8 bottle, is intended to nudge customers into buying more expensive wines, like VQA selections, which cost around $14 a bottle. In other words, the government is hoping that the stinginess of wine customers will motivate them to buy pricier wine.
Those able to resist the temptation to spend an extra $6 will still be helping the local wine industry, as revenue from the tax will be funnelled back into promoting Ontario vineyards.
Critics of the move have noted the obvious: that a tax on blended wine, which contains a minimum of 30 per cent local content, will merely result in customers buying cheaper, completely foreign wine, like Fuzion. “It will be catastrophic,” two of Canada’s largest wineries declared in a letter to grape growers in February.
Aren’t environmental bragging rights enough to prompt people to buy local? Oh, right.
• New tax on cheap wine puts Ontario vintners in a sour mood [Globe and Mail]
Are you buying the big wineries’ spin?! They will not stop making blended wines — too profitable! The tax only applies to CIC wines sold through their private stores (vineyards, wine rack) — which they get as a privilege. If they want to sell blended stuff through those stores, why not pay extra for that privilege — they could just sell VQA in those stores. Too many unfair advantages for big wineries. Just sabre-rattling on their part. Pay no attention!
April 20, 2010 at 7:05 am | by GoofballOf course, the big joke is that wine containing only 30% Canadian content is even called “Canadian wine”!
April 24, 2010 at 9:25 am | by IanReeceIf the Government wants us to buy more local wine than lower the price, I’m not willing to pay $15 for Ontario wine that isnt as good as $10 foreign.
if Ontario was cheaper I’d buy more and sales will increase, and cover the loss on the price.
Simple economics
April 29, 2010 at 11:49 am | by Rob